Chapter 3 Marketing Segmentation. ©2000 Prentice Hall What is Marketing Segmentation? Who uses market segmentation? How does market segmentation operate?

Embed Size (px)

Text of Chapter 3 Marketing Segmentation. ©2000 Prentice Hall What is Marketing Segmentation? Who uses...

  • Chapter 3 Marketing Segmentation

    2000 Prentice Hall

    What is Marketing Segmentation?Who uses market segmentation?How does market segmentation operate?

    2000 Prentice Hall

    Market SegmentationThe process of dividing a potential market into distinct subsets of consumers and selecting one or more segments as a target market to be reached with a distinct marketing mix.

    2000 Prentice Hall

    Mass MarketingOffering the same product and marketing mix to all consumers.

    2000 Prentice Hall

    PositioningEstablishing a specific image for a brand in relation to competing brands.

    2000 Prentice Hall

    Who Uses Market Segmentation?Marketers of consumer goodsRetailersHotelsIndustrial Manufacturers

    2000 Prentice Hall

    RepositioningChanging the way a product is perceived by consumers in relation to other brands or product uses.

    2000 Prentice Hall

    Bases for SegmentationGeographic SegmentationDemographic SegmentationPsychological SegmentationPsychographic SegmentationSociocultural SegmentationUse-Related SegmentationUsage-Situation SegmentationBenefit SegmentationHybrid Segmentation Approaches

    2000 Prentice Hall

    Table 3.1 Market Segmentation Categories and Selected VariablesSEGMENTATION BASESELECTED SEGMENTATION VARIABLESGeographic SegmentationClimateDensity of areaCity SizeRegionSouthwest, Mountain States, Alaska, HawaiiMajor metropolitan areas, small cities, townsUrban, suburban, exurban, ruralTemperate, hot, humid, rainyDemographic SegmentationIncomeMarital statusSexAgeUnder 11, 12-17, 18-34, 35-49, 50-64, 65-74, 75-99, 100+Male, femaleSingle, married, divorced, living together, widowedUnder $25,000, $25,000-$34,999, $35,000-$49,999, $50,000-$74,999, $75,000-$99,000, $100,000 and overOccupationEducationSome high school, high school graduate, some college, college graduate, postgraduateProfessional, blue-collar, white-collar, agricultural, military

    2000 Prentice Hall

    Table 3.1 continuedSEGMENTATION BASESELECTED SEGMENTATION VARIABLESPsychological SegmentationLearning-involvementPerceptionPersonalityNeeds-motivationShelter, safety, security, affection, sense of self-worthExtroverts, novelty seeker, aggressives, low dogmaticsLow-risk, moderate-risk, high-riskLow-involvement, high-involvementPsychographicSubcultures (Race/ethnic)ReligionCultures(Lifestyle) SegmentationEconomy-minded, couch potatoes outdoors enthusiasts status seekersAmerican, Italian, Chinese, Mexican, French, PakistaniCatholic, Protestant, Jewish, Moslem, otherAfrican-American, Caucasian, Asian, HispanicFamily life cycleSocial classLower, middle, upperBachelors, young married, full nesters, empty nestersAttitudesPositive attitude, negative attitudeSociocultural Segmentation

    2000 Prentice Hall

    Table 3.1 continuedSEGMENTATION BASESELECTED SEGMENTATION VARIABLESUse-Related SegmentationBrand loyaltyAwareness statusUsage rateHeavy users, medium users, light users, non usersUnaware, aware interested, enthusiasticNone, some, strongUse-Situation SegmentationLocationObjectiveTimeLeisure, work, rush, morning, nightPersonal, gift, snack, fun, achievementHome, work, friends home, in-storePersonSelf, family members, friends, boss, peerBenefit SegmentationConvenience, social acceptance, long lasting, economy,value-for-the-money

    2000 Prentice Hall

    Table 3.1 continuedSEGMENTATION BASESELECTED SEGMENTATION VARIABLESGeodemographicsMoney and Brains, Black Enterprise, Old Yankee Rows, Downtown Dixie-StyleDemographic/psychographicCombination of demographic and psychographic profiles of consumer segments profilesSRI VALSTMActualizer, fulfilled, believer, achiever, striver, experiencer, maker, strugglerHybrid SegmentationVALSTM is an example of a demographic/psychographic profile. PRIZM is an example of a geodemographic profile.

    2000 Prentice Hall

    Geographic SegmentationThe division of a total potential market into smaller subgroups on the basis on geographic variables (e.g., region, state, or city).

    2000 Prentice Hall

    Micro-marketingHighly regionalized marketing strategies that use advertising and promotional campaigns specifically geared to local market needs and conditions.

    2000 Prentice Hall

    Demographic SegmentationAgeSexMarital StatusIncome, Education, and Occupation

    2000 Prentice Hall

    AgeAge effectsoccurrences due to chronological ageCohort effectsoccurrences due to growing up during a specific time period

    2000 Prentice Hall

    SexTraditional roles of men and women in purchasesChanging sex rolesDual-income householdsWorking women less accessible through traditional media

    2000 Prentice Hall

    Marital StatusHouseholds as a consuming unitSinglesdivorcedsingle parentsdual-income married

    2000 Prentice Hall

    Income, Education, and OccupationIncome often combined with other variables for segmentationThe three variables tend to be correlated

    2000 Prentice Hall

    Psychological SegmentationMotivationsPersonalityPerceptionsLearningAttitudes

    2000 Prentice Hall

    AIOsPsychographic variables that focus on activities, interests, and opinions. Also referred to as Lifestyle.

    2000 Prentice Hall

    Table 3.2 A Portion of an AIO Inventory Used to Identify Techno-Road-WarriorsInstructions: Please read each statement and place an x in the box that best indicates how strongly you agree or disagree with the statement.

    I feel that my life is moving faster and faster, sometimes just too fast.

    If I could consider the pluses and minuses, technology has been good for me.

    I find that I have to pull myself away from e-mail.

    Given my lifestyle, I have more of a shortage of time than money.

    I like the benefits of the Internet, but I often dont have the time to take advantage of them.

    I am generally open to considering new practices and new technology.[1][2][3][4][5][6][7][1][2][3][4][5][6][7][1][2][3][4][5][6][7][1][2][3][4][5][6][7][1][2][3][4][5][6][7][1][2][3][4][5][6][7]Agree CompletelyDisagree Completely

    2000 Prentice Hall

    Table 3.3 A Hypothetical Psychographic Profile of the Techno-Road-WarriorGoes on the Internet 6-plus times a weekSends and/or receives 15 or more e-mail messages a weekRegularly visits Web sites to gather information and/or to comparison shopOften buys personal items via 800 numbers and/or over the InternetMay trade stocks and/or make travel reservations over the InternetEarns $100,000 or more a yearBelongs to several rewards programs (for example, frequent flyer programs, hotel programs, rent-a-car programs)

    2000 Prentice Hall

    Sociocultural SegmentationFamily Life CycleSocial ClassCulture, Subculture, and Cross-Culture

    2000 Prentice Hall

    Family Life CyclePhases a family goes through in their formation, growth, and final dissolutionBachelorhoodHoneymoonersParenthoodPost-parenthoodDissolution

    2000 Prentice Hall

    Culture, Subculture, an Cross-CultureSegmenting on the basis of cultural heritageassumes members of the same culture share the same values, beliefs, and customsSubcultures are united by certain experiences, values, or beliefs.e.g., Hispanic subculture, African American subculture, etc.

    2000 Prentice Hall

    Use-Related SegmentationRate of UsageHeavy vs. LightAwareness StatusAware vs. UnawareBrand LoyaltyBrand Loyal vs. Brand Switchers

    2000 Prentice Hall

    Usage-Situation SegmentationSegmenting on the basis of special occasions or situations

    2000 Prentice Hall

    Benefit SegmentationSegmenting on the basis of the most important benefit sought by consumers when purchasing the product or serviceToothpaste can be bought forGood Taste (e.g., Colgate)Fresh Breath (e.g, Close Up)White Teeth (e.g, Rembrandt)Cavity Protection (e.g., Crest)

    2000 Prentice Hall

    Hybrid Segmentation ApproachesPsychographic-Demographic ProfilesGeodemographic SegmentationSRI Consultings Values and Lifestyle System (VALSTM)

    2000 Prentice Hall

    Table 3.4 Selected Psychographic/Demographic Characteristics of the PC Magazine SubscriberDEMOGRAPHICSPercentSEX (BASE 990)Men86Women13PSYCHOGRAPHICSPercentUSE A COMPUTER100At home96At work89On vacation/traveling46AGEUnder 25 525 - 341835 - 442945 - 543155 - 641265 or older 5Mean age44.1SELECTED USE OF COMPUTERWord Processing96Connect to Internet86E-mail84For work80Accounting/record keeping75Reference68Recreation/games66

    2000 Prentice Hall

    Table 3.4 continuedDEMOGRAPHICSPercentPSYCHOGRAPHICSPercentEDUCATIONSome college or less27Graduate college27Education beyond college graduate46EMPLOYMENT STATUSEmployed by someone else68Self-employed21Other11PORTABLE DEVICES USES WHEN TRAVELING ON BUSINESSLaptop/notebook computer57Cellular phone47Beeper or pager30Personal Digital Assistant/ electronic organizer14

    2000 Prentice Hall

    Table 3.4 continuedDEMOGRAPHICSPercentPSYCHOGRAPHICSPercentOCCUPATION/BUSINESS DEPT.Computer related- professional22Senior or corporate management16Engineering-related professional13Administrative/ manufacturing, accounting, finance, purchasing, advertising, marketing, sales26Others23TRAVEL FOR BUSINESS/PLEASUREBusiness Travel5 or more days per month315 or more nights away from home per month17Pleasure/Vacation Travel15 or more days per year37Mean number of days per year15.5MEMBER OF FREQUENT FLYER PROGRAMS90

    2000 Prentice Hall

    Table 3.4 continuedDEMOGRAPHICSPercentPSYCHOGRAPHICSPercentINCOMEUnder $30,0007$30,000 - $49,99915$50,000 - $74,99924$75,000 - $99,99919$100,000 or more24Mean income$87,700PRIMARY RESIDENCEOwn74Rent18Other3No answer5FINANCIAL SERVICESCurrently ownMutual funds48Stocks44Bonds24Life insurance/annuities44Currently useBrokerage services36On-line investment services16Retirement/financial planning41

    2000 Prentice Hall

    Table 3.4 continuedRESPONSE OF SELECTED CONSUMER PSYCHOGRAPHIC ST